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The 4 best credit card readers: Square isn't your only option

The variety of best credit card readers for small businesses available on the market can overwhelm any business owner. We narrowed the list down to four, with honorable mentions.
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Written by Cynthia Bowman, Contributing Writer on

Small business owners, retailers, and crafters should take note -- a cash-only business may be limiting your potential for growth. More than half of consumers use cards such as credit or debit to purchase goods and services. They also tend to spend more when they can pay with their credit card. After all, there is only so much you can buy if you can only pay with a limited amount of cash available in your wallet.

Small businesses that don't accept card payments are potentially missing out on additional revenue. For many, the fears of card compliance, customer data protection, and expensive card processing fees are well-founded. Fortunately, there are a variety of best credit card readers for small business that are affordable, scalable, and simple to set up. They take care of most of the issues that may be holding you back from accepting credit and debit cards so you can focus on selling your product to the largest market possible. We've created a shortlist of four of the best card readers -- and the companies that offer them -- so you can start accepting card payments as soon as today.

The following picks are ZDNet's best credit card readers for small businesses based on features, pricing, and more. Whether you're just getting started or in search of a fuller-featured card acceptance solution, one or more of the following readers may be a good option to consider.

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Square's free, entry-level solution is the best option for small businesses that are just getting started with card-based sales.

  • Hardware specifications: Android and iOS mobile devices
  • Where to buySquare
  • Pricing: Reader is free, 2.6% + 10¢ per swipe for Discover, Visa, Mastercard and American Express transactions

New businesses thinking of testing credit card transactions will like the simplicity of the Square card reader. There are no contracts, minimums, or monthly transaction fees to worry about. You'll only pay a processing fee when you process a card sale, and you can receive payment as fast as one business day. The pocket-sized reader plugs into your smart device's headset or lightning port and integrates with Square's free Point of Sale app to make credit card processing possible -- even when there is no internet connectivity. 

Square has alternate solutions as your business grows. To accept chip cards and Apple Pay, upgrade to the Square Reader for $49.99 to wirelessly connect to multiple devices via Bluetooth. For the most versatile solution, the Square Terminal for $299 is an all-in-one credit card reader and receipt printer.

Pros

  • Free magnetic stripe reader and app
  • Portable
  • No charging required
  • No contracts
  • Offline payments possible

Cons:

  • Takes over your smart device's sole audio or charging outlet
  • Swipe fee of 2.6% can get pricey for larger transactions
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For a small but robust countertop credit card reader, the Clover Mini can work for a variety of small specialty businesses including restaurants and retail.

  • Hardware specifications: Android and iOS when using ShopKeep Register
  • Where to buyAmazonClover and many banks
  • Pricing: $450 to $899 for the reader, processing fees depend on the payment processing company you choose

Clover has entry-level to full-featured card readers. The Mini is our pick from Clover for best credit card readers for small businesses. It's a small, portable version of the company's comprehensive POS system with features that include an integrated receipt printer, customer-facing camera, a barcode scanner, NFC reader (for Apple or Google Pay), touch-screen PIN pad, and signature capture. You can tether two devices via USB when you'd like to have a terminal on the customer side and the register end. The Clover App market provides a variety of apps for the Mini to customize its function based on your industry and needs.

Pros

  • Small countertop design
  • Customizable
  • Customer and inventory management
  • Multiple card payment options (swipe, tap, dip)
  • Integrated camera doubles as a barcode scanner

Cons:

  • Requires a merchant account
  • Reader pricing depends on the merchant processor you choose
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PayPal Zettle offers convenient and flexible payment solutions through the Zettle Reader -- for an affordable, contract-less price.

  • Hardware specifications: Bluetooth
  • Where to buyPayPal
  • Pricing: $29 for the first terminal ($79 for all addition, 2.29% plus $0.09 per transaction, 3.5% for keyed transactions

PayPal Zettle aims to make accepting debit and credit cards as inclusive as possible. Its mobile credit card readers are Bluetooth-enabled, so your business can get paid nearly anywhere your mobile device works. As a first-time business shopper, PayPal sells the Zettle Reader for $29, charging $79 for each additional device. It accepts magnetic stripe, chip, tap and Google Pay, Apple Pay, and Samsung Pay. In addition, you can process PayPal or Venmo QR code payments via the Zettle companion app (iOS and Android).

It's worth knowing how fund availability and reserves work when using PayPal's service. Most card transactions will appear in full in your PayPal account, ready to be transferred to your bank by the business day. In other cases, if PayPal notices that you've frequently processed refunds, chargebacks, or any other suspicious activity, it may keep a partial or all of your funds on reserve. Then, you may be required to wait up to 90 days before they are made available for your use.

Pros

  • Very affordable multi-payment card reader
  • Accepts magnetic stripe, chip, tap, and NFC payments
  • Instant transfers to your bank account for 1.5% of the amount
  • Integrates with online invoicing
  • International and Venmo transactions are also available

Cons:

  • PayPal funds may be reserved based on account activity
  • Must manually transfer profits to your bank account
  • Cross-border fees if you sell to international customers

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Small businesses ready for bigger card volume will find that the more card sales you make using the full-featured Helcim Card Reader, the cheaper your processing costs will be.

  • Hardware specifications: Android, iOS and Windows
  • Where to buyHelcim
  • Pricing: $199 for terminal, fees of 0.30% plus $0.08 per transaction up to $25,000 in sales per month, and as low as 0.10% plus $0.05 based on volume

Helcim is a good option for small businesses ready to get serious about accepting credit and debit cards. The company's card reader is the most full-featured of the top card readers reviewed, accepting contactless, swiped, tapped, and pin cards. In addition, the terminal is compatible with debit card chip-and-pin transactions. 

While the terminal itself is a big selling feature, Helcim's approach to card processing fees could be a big selling point for companies making a few thousand dollars or more of card sales per month. Helcim does not charge monthly fees and bases its processing fees on a sliding scale. The more volume, the less you'll pay in card fees, with rates starting at 0.30% plus $0.0 for sales of $0 to $25,000. 

Pros

  • No monthly fees
  • The most robust reader reviewed, accepting all types of debit, credit cards, and mobile wallets
  • Compatible with desktop computers, smartphones, and tablets
  • Lower processing fees for more card sales

Cons:

  • Best for companies making consistent credit card sales

How did we choose these credit card readers?

To narrow the list of best credit card readers for small business to five, several criteria were considered. Simplicity was essential since most small business owners don't have the time to set up an intricate card payment process for their business. Devices that are "plug and play" and have solid customer support available were a priority. 

In addition to ease of use, costs were another important factor. Depending on what phase the small business is in, equipment costs, card processing fees, and monthly charges could affect a company's bottom line. We chose companies offering card readers with affordable, transparent pricing and a simple fee structure without a long list of hidden charges. 

Lastly, scalability was important. Knowing you can upgrade to a more advanced credit card reader with the same processor or platform can save you valuable time as your business grows.

Which is the right credit card reader for you?

If you're just getting started, Square offers a free credit card reader, fixed-rate processing fee, and no commitment, which is ideal for smaller, occasional sales. However, you may want to opt for a credit card reader compatible with your current e-commerce/retail setup. For example, Shopify or PayPal business owners can take advantage of the company's software and integrated payment processing hardware to keep card acceptance as simple as possible. 

However, once your business starts increasing the volume of online sales, scaling up may be more cost-effective if you shop around for a merchant processor with lower fees. Although a full-featured terminal may be more expensive, it will likely be worth the investment if it's more compatible with multiple card transaction types. Clover offers robust equipment that can be used with an independent processor such as a bank or merchant processing company. Helcim's credit card processing pricing gets cheaper once you start making more card sales.

What type of credit card readers are available?

There are a variety of credit card readers. The most basic is a small magnetic stripe reader that plugs into your mobile device. Next is the chip and swipe reader which can also process chip cards that must be inserted instead of swiped. The latest readers are contactless, requiring a customer to tap their card on the terminal and NFC (near-field communication) compatible for mobile wallets such as Apple Pay and Google Pay. 

Magnetic stripe readers such as Square's are often free, while full terminals such as the Clover Mini can accept all types of card payments and cost hundreds of dollars.

How does a credit card reader work?

The business or merchant enters the amount of the transaction into the terminal and asks the customer to swipe, tap, or insert their card. The reader extracts the bank information from the customer's credit card (in the chip or magnetic stripe) and communicates with the financial institution wirelessly or through a telephone line. If the bank or institution authorizes the transaction, it will issue an approval code and receipt in just a few seconds.

When do I get paid after a credit card sale?

Depending on the card processor, you may receive payment into your account in one or two business days. Some card processors may make same-day payments for an extra fee.

Are there alternative credit card readers worth considering?

The following products didn't make our best credit card readers for small business list but are worth mentioning:

  • Dharma: Dharma isn't technically a card reader, but offers merchant services. You can purchase an independent terminal from Verifone or Ingenico (starting at $249) through Dharma or use your Clover terminal or third-party reader if the fees are adding up. Dharma has low card processing rates of 0.15% plus 7 cents per transaction. It's best for small businesses with higher-dollar sales. However, Dharma has a more stringent application process and pricier card readers.
  • Payanywhere: Although the basic credit card readers are free (for the first one), expect to pay at least $9.95 per month for service. You could opt for Pay As You Go to skip the fees, but you'll be charged $3.99 per month after 12 months of inactivity. A 2.69% transaction fee is applied to all card sales. However, keyed-in transactions are higher at 3.49% plus 19 cents each.
  • QuickBooks mobile card reader: Integration with Quickbooks may be a big selling point, but the five best credit card readers for small business edged the company out for hardware and fees. Quickbooks only offers one card reader. Processing costs $12.50 per month and fees start at 2.4% plus $0.25 per transaction plus an additional 1% fee if you key in a card purchase.

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